The world’s leading companies are only one quarter of the way to keeping in line with global emissions targets, with “substantive” action at the top of supply chains on the horizon.
The news comes from CDP (formerly the Carbon Disclosure Project), the international not-for-profit body measuring the environmental performance of leading global companies.
According to a new baseline-setting report for corporate action on climate change, many major companies are failing to live up global ambitions for tackling greenhouse gas emissions and are expected to start taking significant action in the coming years.
Although 85 per cent of over 1,000 of the world’s biggest companies have set emissions reduction targets, CDP has calculated that current strategies will only achieve a quarter of what is necessary to keep in line with global targets.
It is estimated that the private sector could deliver nearly two thirds of global emissions targets by 2030.
The news has significant repercussions for businesses in supply chains, with companies at the top of the chain likely to take an increasingly active role in ensuring high environmental performance from suppliers.
Only 14 per cent of companies have set targets beyond 2030, something which CDP says must change.
Paul Simpson, chief executive of CDP, said: “While many [companies] are already on the right path, there is still a large gap to close.
“With hundreds of companies already disclosing to CDP that they anticipate substantive changes to their business resulting from the Paris Deal [on climate change], we expect to see a shift to longer-term, more science-based targets in future years.”
The report shows that companies taking the most action are realising significant benefits.
62 leading companies have succeeded in collectively reducing emissions by 26 per cent over the last five years, increasing revenue by 29 per cent in the process. In comparison, the rest of the companies tracked collectively saw a six per cent decrease in revenue and six per cent rise in emissions.
CDP is already tracking a group of over 700 ‘non-disclosing’ companies to monitor if they begin to take more action and will help investors to assess the risks.
“As investors look to reduce risk by shifting investments to less carbon intensive infrastructure, the spotlight will shine more intensely on corporate actions”, Simpson added.
The CDP website includes climate change rankings for thousands of companies that have publicly disclosed their performance.